Lloyd's Chairman Decries ?Litigation Culture'

Lloyd's Chairman Decries ?Litigation Culture'

NU Online News Service, Sept. 16, 4:05 p.m. EDT?Speaking at Town Hall Los Angeles, Lord Peter Levene, chairman of Lloyd's, said the "litigation culture" and increasing barriers to free trade cause serious harm to industries that support economic and social progress.

Lord Levene also announced the results of a joint Lloyd's/Town Hall survey of Los Angeles business leaders, which showed that 95 percent believe the cost of litigation is a drain on the economy, while 94 percent are concerned about the potential impact of liability costs on their own business or industry.

Addressing the Town Hall members, he noted that "the U.S. and the U.K. have a common bond to see our intertwined economies do better. But barriers to trade, such as those that affect the insurance industry, and actions that drain an economy, such as excessive litigation, hold back growth and progress."

Lord Levene added that tort reform was urgently needed to combat growing litigiousness in the U.S., which ultimately resulted in skyrocketing premiums for policyholders.

"My point is that today's culture is a brake on enterprise and innovation," he said. "The fear of being sued is making everyone more and more cautious?to the detriment of everyone. This new culture does more than simply sap the will of the risk taker. It corrodes the economy."

Lord Levene pointed out that at current levels, U.S. tort costs are equivalent to a 5 percent tax on wages. "At this rate of increase, by 2005 tort costs could equal $1,000 per citizen per year."